Apple Stores Killing AT&T and Verizon iPhone Subsidies

If you’re a serial iPhone upgrader — and by that I mean you’re the type of person who lines up on the device’s launch day or you pre-order the moment the online Apple Store will take your credit card — things are about to change if you’re with the nation’s two largest carriers.

Apple Store employees reportedly got the word from Cupertino that iPhones will no longer be sold with the carrier subsidies from the providers. In the case of AT&T, iPhones will be sold through its Next program, meaning they will be financed over 20 to 30 payments, with early upgrades at a year to two years. (AT&T’s business customers will continue to be eligible for subsidized iPhone purchases.)

Verizon has a similar program, the Edge program, which also offers an early upgrade program through Edge Up. However, early Edge Up upgrades will not be eligible for early upgrades. Big Red’s customers will have to wait two years for an Edge upgrade. The Apple Store will also do away with subsidized sales by the end of the summer.

In the case of AT&T’s customers, there’s no upfront payments (though there’s an option for that) with 20 monthly payments which works out at $32.50 a month on a 20-month, 12-month upgrade Next plan for a 16GB iPhone 6. There’s nothing down (for qualified customers) on Verizon’s Edge either, with $27.08 a month, though the upgrade won’t kick in until 24 months.

The older, subsidized plans were often criticized for not allowing customers to pay off the device and the monthly service fees would not come down, even after the contract had been fulfilled. The newer plans finance the cost of the device and once the smartphone’s paid off, the monthly bill goes down accordingly.